The Secret to Free and Valuable Coupons
FTC Charges Pitchmen with Deceptive Magazine Subscription Telemarketing"The Federal Trade Commission has charged several Pennsylvania-based defendants with violating the FTC Act and the Telemarketing Sales Rule (TSR) by calling consumers and telling them they were eligible to receive valuable coupons; for groceries and other items, when in fact they were luring them into signing up to purchase unwanted magazine subscriptions. The Commission's complaint states that the defendants, collectively known as Magazine Solutions, often did not tell consumers up-front that to get the coupons they had to buy the subscriptions, and sometimes claimed the magazines were free or that the consumers only had to pay shipping and handling. When consumers tried to cancel their orders, many found it was nearly impossible to do, and were stuck with subscriptions to magazines they never wanted in the first place."
How were they able to do this? This is from the FTC's complaint:
"Since at least April 2002, and continuing thereafter, Defendants have telemarketed a package typically consisting of approximately five magazine subscriptions and a coupon certificate booklet. The magazines are published by national publishers of business, professional, and consumer magazines, and include such well-known magazines as American Baby and Reader's Digest. The magazine subscriptions are of varying lengths, typically lasting between one year and five years. Defendants claim that the coupons are for grocery and household items and are worth at least $1000. The coupons, if actually provided to consumers, are not provided by Defendants but by a third party. Until approximately September 2006, regardless of the magazines provided or the length of the magazine subscriptions, Defendants charged a total of $777 in monthly installments for the package. Starting in approximately September 2006, Defendants began offering some consumers a package consisting of coupons Defendants claim are worth over $1000 and subscriptions to four magazines for $598.50 paid in monthly installments.
To sell their goods, Defendants make a series of unsolicited calls to consumers nationwide. Defendants target new mothers or families with young children. Typically, in their first call to consumers, Defendants expressly state that they are not selling anything, but rather, are calling to inform the consumer that he or she has been specially selected to participate in a program, and that if the consumer qualifies, he or she will receive $1000 in coupons. Defendants tell the consumer that to receive these valuable coupons, the consumer must first take a short survey or answer a few questions about his or her shopping habits to determine whether he or she qualifies. Defendants represent that the survey is to determine the consumer’s opinion regarding products, and that the results are conveyed to product manufacturers. In fact, the survey is merely a ruse used by Defendants to discover whether the consumer is employed, has a credit card and/or checking account and can therefore pay for Defendant's; magazine service. It is also used to help identify certain interests that the consumer may have, so that Defendants can then identify which magazines the consumer may desire. Defendants create the impression that they are giving away coupons, but do not disclose that in reality, they are selling magazine subscriptions. In addition to the coupons, Defendants sometimes promise consumers a free vacation get-away."
I don't know about you, but why would anyone agree to pas $777 a month for five magazine subscriptions? Well, the pitch on the phone represented that the subscriptions cost only $12.95 per month. Many of the consumers did not agree to the offer and asked only for the materials to be sent to their house for review.
The company would then ask to tape the conversation in which the basis details of the deal were reiterated - for compliance purposes. The unaware consumer would agree, receive the materials, and realize that there was a small difference between $777 and $12.95 and believing that they had not contracted for any magazines would throw the materials away.
The FTC alleges that the company would then phone back these consumers demanding payment, threatening lawsuits, and claiming that they had proof -the oral tape- of the consumer's agreement.
Just another reason to buy an answering machine and respond only to real friends that are phoning you.
